Unformatted text preview: are only two firms in an economy: Cowhide, Inc. produces leather and sells it to
Couches, Inc., which produces and sells leather furniture. With each $1,000 of leather that it buys
from Cowhide, Inc., Couches, Inc. produces a couch and sells it for $3,000. Neither firm had any
inventory at the beginning of 2006. During that year, Cowhide produced enough leather for 20
couches. Couches, Inc. bought 80% of that leather for $16,000 and promised to buy the remaining
20% for $4,000 in 2007. Couches, Inc. produced 16 couches during 2006 and sold each one during
that year for $3,000. What was the economy's GDP for the 2006?
15. An American company operates a fast food restaurant in Romania. Which of the following
statements is accurate?
i. The value of the goods and services produced by the restaurant is
included in Romanian GDP, but not in U.S. GDP.
ii. The value of the goods and services produc...
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This document was uploaded on 03/13/2014 for the course ECO 221 at Miami University.
- Spring '14